Analysis: Salesforce to exit Dropbox in upcoming IPO

Salesforce is expecting to exit the file storage and sharing platform Dropbox, which filed for an IPO after having raised more than $1.7bn in debt and equity financing.

Author: Kaloyan Andonov, reporter, GCV Analytics

In January US-based file storage platform Dropbox filed for an initial public offering (IPO) to raise up to $500m in an initial public offering on the Nasdaq Global Select Market, which would allow enterprise software producer Salesforce to exit. Goldman Sachs and JPMorgan Chase were select as lead underwriters.

The flotation is to follow over $600m in equity funding in addition to $1.1bn in debt financing from banks including JP Morgan, Bank of America, Deutsche Bank, Goldman Sachs, Macquarie and Royal Bank of Canada.

Founded in 2007, Dropbox runs a cloud-based storage and sharing platform with more than 500 million users, 200,000 of which are businesses and more 11 million of which pay for subscriptions. The company has been increasingly moving into business collaboration software. Dropbox’s revenue increased from $604m to $1.1bn from 2015 to 2017, at a compound rate of 35%, having also generated free cash flow of over $300m last year.

This is going to be one of the largest exits to date for Salesforce, which has been investing primarily in emerging enterprise software developers. Most of its notable exits in recent years, whether IPOs or acquisitions, have been from such enterprises, as shown on the bubble chart by GCV Analytics.

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